US TV Sales Weaken
While the quarter is not quite over, it looks like US TV sales are heading down and the channel fill that helped to boost March sales does not look like it will materialize this quarter. Expectations for June are for ~2.3m units, which would put US TV sales for 2Q at just under 7.8m units, down 24.2% q/q Channel purchases are expected to be ~8.7m units for the quarter while sales are expected to be 7.8m, leaving near-term inventory of .9m units. Last quarter channel purchases were ~9.3m units, while sales were 10.3m, leading to what we estimate was between .3m and .3m in incremental channel purchases in April.
That said, if our expectations for June are correct, the Q monthly sales average has declined to 2.59m from 3.42m units/month in 1Q. Some of the strength in 1Q can be attributed to stimulus checks but we believe the US vaccination program has allows consumers to return to at least a semblance of what was a normal lifestyle, which includes being out of the house and away from a television, lessening the need to replace, upgrade, or enlarge existing installations. Should the next two months continue that lower trend, if would signal a return to pre-pandemic levels, and while 3Q and 4Q are typically the seasonally better quarters, this holiday season could prove a bit difficult given the rapidly rising prices of TV display panels and components.
TV set manufacturers and retailer seem to be becoming a bit more realistic about their expectations for the full year, while IT product producers are still looking for the rocket ride to continue. There are some signs that notebook demand is slowing, but it is hard to discern whether it is demand driven or supply limited due to component shortages, but as we head into the summer months and a bit of normalcy returns, at least in the US, we should get a better understanding of the split between the two. Other regions that do not have the luxury of the high availability of current COVID-19 vaccines might take longer to return to patterns seen pre-COVID, but once the data confirms the trends in the US, it will likely set the tone for other regions.
That said, if our expectations for June are correct, the Q monthly sales average has declined to 2.59m from 3.42m units/month in 1Q. Some of the strength in 1Q can be attributed to stimulus checks but we believe the US vaccination program has allows consumers to return to at least a semblance of what was a normal lifestyle, which includes being out of the house and away from a television, lessening the need to replace, upgrade, or enlarge existing installations. Should the next two months continue that lower trend, if would signal a return to pre-pandemic levels, and while 3Q and 4Q are typically the seasonally better quarters, this holiday season could prove a bit difficult given the rapidly rising prices of TV display panels and components.
TV set manufacturers and retailer seem to be becoming a bit more realistic about their expectations for the full year, while IT product producers are still looking for the rocket ride to continue. There are some signs that notebook demand is slowing, but it is hard to discern whether it is demand driven or supply limited due to component shortages, but as we head into the summer months and a bit of normalcy returns, at least in the US, we should get a better understanding of the split between the two. Other regions that do not have the luxury of the high availability of current COVID-19 vaccines might take longer to return to patterns seen pre-COVID, but once the data confirms the trends in the US, it will likely set the tone for other regions.
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